Correlation Between Intel and Mutual Of

Can any of the company-specific risk be diversified away by investing in both Intel and Mutual Of at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Intel and Mutual Of into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and Mutual Of America, you can compare the effects of market volatilities on Intel and Mutual Of and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Intel with a short position of Mutual Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Mutual Of.

Diversification Opportunities for Intel and Mutual Of

0.86

Correlation Coefficient

Intel  Mutual Of

Very poor diversification

The 3 months correlation between Intel and Mutual is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Mutual Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Of America and Intel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Intel are associated (or correlated) with Mutual Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Of America has no effect on the direction of Intel i.e., Intel and Mutual Of go up and down completely randomly.

Pair Corralation between Intel and Mutual Of

Given the investment horizon of 90 days Intel is expected to generate 3.37 times more return on investment than Mutual Of. However, Intel is 3.37 times more volatile than Mutual Of America. It trades about 0.11 of its potential returns per unit of risk. Mutual Of America is currently generating about 0.16 per unit of risk. If you would invest  2,010  in Intel on August 31, 2024 and sell it today you would earn a total of  355.00  from holding Intel or generate 17.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  Mutual Of America

Intel

Risk-Adjusted Performance

8 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mutual Of America

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mutual Of America are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Mutual Of may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Intel and Mutual Of

The main advantage of trading using opposite Intel and Mutual Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Mutual Of can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mutual Of will offset losses from the drop in Mutual Of's long position.

The idea behind Intel and Mutual Of America pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.